Professor: ‘Brain drain’ is good for increasing global Israeli footprint

By Yonah Jeremy Bob01/28/2014

Orly Lobel of the University of San Diego Law School says laws should change to free up talent capital.

Prof. Orly Lobel expounded on her views that law should free up human talent and capital in a recent talk with The Jerusalem Post. She also criticized legal regimes as unjustifiably limiting employees from jumping ship to new jobs, limiting individual liberty and holding back broader societal innovation.

Lobel, who grew up in Israel but is currently a professor at the University of San Diego Law School, spoke to the Post after a recent conference at Bar-Ilan University, where she unveiled various ideas contained in her new book Talent Wants to be Free.

She said that invention assignment contracts, strict protection of copyrights and patents and non-compete agreements that prevent competition as well as prevent employees from joining competitors have grown exponentially, both in numbers and scope. These are negatively impacting individuals and causing stagnation, instead of economic innovation and growth.

Currently, she said, employers are creating wider definitions to non-compete agreements of “skills, trade secrets, formalized technical knowledge and even knowledge related to research,” in a way that slows development and innovation instead of encouraging it.

She added that some such agreements have been expanded to include “networks, customer lists and non-solicitation clauses” for other clients.

Lobel said that a “more litigious” attitude has also taken hold in terms of enforcing these non-compete agreements, even where the enforcement does not fulfill a particularly useful role.

Ipso “de facto this reduces competition,” she said, adding that these trends are “human capital controls” that from an “antitrust perspective [that] is just like fixing prices.”

Lobel says that we should instead be “freeing the human capital pool.”

There are “lots of new studies from business schools, economists, psychologists, geologists” arguing for the value of “regional growth” being enhanced by “encouraging mobility” and having flexible “knowledge networks in a region,” she said.

“We need to try to shift the discussion from it being a labor issue to a workers’ rights issue” with “start-up culture norms” being more dominant and companies voluntarily deciding “not to enforce non-compete agreements as much – like in California,” Lobel asserted.

Next, Lobel said that employers should view employees leaving not as abandonment, but as potential “good will ambassadors” for collaboration with the new employer.

She called her views similar to the “Medici effect” in which diversity drives innovation.

In the job world, this means creating knowledge centers with different companies located in the same area, having “inventive proximity and interaction” and even moving jobs between employees to maximize the amalgamation of creative ideas.

All of this contrasts with the concept of keeping employees perpetually at the same jobs.

Lobel also applies her ideas of “freeing talent” to the international arena, for example regarding the Israel “brain drain” phenomenon, in which Israeli academics are going abroad – and winning major academic honors.

She contests much of what has been treated as conventional wisdom, that these academics leaving the country hurts Israel and wastes the educational investment made in these academics – in that the fruits of their labor are enjoyed by their adoptive foreign countries.

Lobel related accounts of a “boomerang effect” in which Israelis in Silicon Valley purchase Israeli start-ups in a way that might not have occurred had the Silicon Valley decision- maker not been Israeli and been less familiar with what Israeli companies have to offer.

She said that the same is true in academia, where she said having so many Israeli academics abroad increases “connectivity,” and the profile of Israeli universities, in terms of exchanges, conferences, networking and general reputation.

Giving herself as an example, Lobel said that, “I’m a professor in California and I’m not physically in Israel, but it is not a zero sum game.”

Lobel said that twice a year she teaches courses at Tel Aviv University, including having as many as 80 students in a three week seminar and attends many conferences in Israel.

She added that she continues to write in Hebrew and recently wrote joint articles with a Bar- Ilan University colleague, Prof. Yuval Feldman.

She said there were also other fringe benefits, such as that she and Feldman had an efficiency advantage of “constantly making progress on the article from our different time-zones.”

Lobel said she disagreed with, what she called, journalist Thomas Friedman’s famous argument, in which he states that space has become irrelevant and effectively died as a result of globalization.

She said that having Israeli academics overseas provides the unique and crucial “benefit of face to face interactions” with foreign academics, for building deeper relationships and putting Israel on the map in a more significant way.

Lobel had initially undertaken a temporary academic program in the US and “had not planned to stay,” but even as her life appears mostly settled in the US, and her professional English may exceed her professional Hebrew, she still “only speaks Hebrew with her kids.”